Volume 1 Number 35
August 30, 2004









Under the terms of settlements announced between securities regulators and Deutsche Bank Securities Inc. and Thomas Weisel Partners LLC, Florida stands to receive over $1 million upon final acceptance of the terms of the agreement, according to Florida's Chief Financial Officer Tom Gallagher and Don Saxon, Commissioner for the state's Office of Financial Regulation. The settlements result from allegations of conflicts of interest at brokerage houses where analysts recommended stocks due to improper influence from their investment banking colleagues.

The announcement follows an investigation of the two firms by a state securities working group, the U.S. Securities and Exchange Commission, NASD, Inc., and the New York Stock Exchange. The settlements are related to the April 2003 Global Settlement that ten other investment banks reached with the state, federal and industry regulators.

Deutsche Bank will pay a total of $87.5 million:  $25 million in disgorgement, $25 million as a penalty for various conflicts of interest, $25 million to fund independent research, $5 million to fund and promote investor education, and $7.5 million for failing to promptly produce e-mail and thereby delaying by over a year the investigation of Deutsche Bank.

Thomas Weisel Partners will pay a total of $12.5 million:  $5 million in disgorgement, $5 million as a penalty for various conflicts of interest, and $2.5 million to fund independent research.

Gallagher said the investigations of Deutsche Bank and Thomas Weisel Partners, together with the 2003 Global Settlement, are part of a comprehensive regulatory effort to reform the relationship between investment banking and research and to manage appropriately conflicts of interest. "Today's settlements represent a significant step in our continuing efforts to ensure that investors are treated fairly and provided with objective research."

Under the terms of the settlement, Deutsche Bank is also required to distribute $2.5 million to the Investor Protection Trust (IPT), which will use the money to fund investor education initiatives on the state and national levels. The IPT is an established charitable organization with experience handling settlement funds and a history of investor education successes.

"These enforcement actions, coupled with pending reforms in the mutual fund industry, should help to restore investor confidence," Saxon said.